Oman has run a 1.8 billion riyal (Dh17.09 billion) budget deficit so far this year, according data provided by the Ministry of Finance. The approved deficit for 2015 budget stands at 2.5 billion riyals — an increase of 38.9 per cent compared to last year, according to the budget statement.
Oman and Bahrain are the most vunerable Gulf countries due to a prolonged slump in the oil prices, according to Standard and Poor’s credit rating agency. The agency attributed this to the low fiscal reserves and lack of economic diversification.
Moreover, Oman’s sovereign wealth fund (SWF) has assets of $13 billion, far smaller than other Gulf SWFs.
Ministry of Finance data showed allocations for government wages and salaries amounting to 1.5 billion riyals, including 3.5 million riyals as pension payments for retired ministers, 1.3 billion riyals as allowances (including cost-of-living allocations) and 225 million riyals for other dues in 2014.
With regard to the expenses of civil ministries, government units and public authorities for the fiscal year 2014, spending rose to 4.7 billion riyals, up from an estimated 4.4 billion riyals.
It distributed 614 million riyals to the public services sector, 141 million riyals to the security and public order sector, 1.7 billion riyals to the education sector, 691 million riyals to health, 593 million riyals to the security and social welfare sector, 581 million riyals to the housing sector, 231 million riyals to Culture and Religious Affairs, 4.8 million riyals to the energy and fuel sector, 62 million riyals to the agriculture and fisheries sector, 63.6 million riyals to the transport and communications sector and 60 million riyals for other economic affairs.
The total actual revenues of the sultanate during the last fiscal year stood at 14.1 billion riyals compared to a revenue estimate of 11.1 billion riyals for the same year.
The data showed that the significant increase in total revenues was due to the increase in oil revenues — with 10.2 billion riyals being oil revenues and 1.6 billion riyals being gas revenues.
The data indicated that public spending which was approved by the Ministry of Finance was 13.5 billion riyals in 2014, but it rose to 15.2 billion riyals due to the adoption of additional allocations in 2014.
The report by the Ministry of Finance called for an additional push to diversify the economy in a move aimed at reducing its dependence on oil.
By Fahad Al Mukrashi